Web Desk: Pakistan’s central bank is preparing to introduce a new cheque-clearing mechanism that will allow banks to process cheques using electronic images instead of physically transferring the original documents.
The State Bank of Pakistan said the pilot phase of the Pakistan Express Cheque System, or PECS, will begin on Oct. 15, 2026, as part of efforts to modernise the country’s payment infrastructure.
The new system is expected to be rolled out nationwide by April 30, 2027.
Under the new arrangement, customers will continue to deposit paper cheques at bank branches. However, instead of sending the physical document through the clearing network, the depositing bank will scan the cheque and transmit its electronic image to the clearing house, National Institutional Facilitation Technologies, or NIFT.
NIFT will then forward the digital image and relevant captured information to the bank responsible for processing the cheque.
The receiving bank will examine the electronic information and decide whether to authorise the payment or reject the cheque.
The original paper cheque will generally remain with the bank where it was deposited rather than being physically moved through the clearing process.
However, if the receiving bank has concerns about the authenticity of the cheque or the quality of its electronic image, it can request the original document for further verification.
Such cases will be placed under a process known as “Defer for Physical,” allowing the bank to examine the physical cheque before making a final decision.
Banks participating in the system will be able to capture cheque images using dedicated scanning equipment at their branches.
Where a branch does not have the required scanning facilities, NIFT will handle the physical collection and scanning process before sending the electronic image to the relevant bank.
The arrangement is designed to allow institutions with different levels of technological capability to participate in the new clearing framework.
The initial trial will run from Oct. 15 to Nov. 15 and will involve a limited number of banks and participating institutions.
After that, the electronic clearing mechanism will gradually expand to additional institutions and branches between Nov. 16 and Dec. 31.
The central bank plans to complete the nationwide transition by April 30, 2027.
The new system is intended to reduce the need to physically transport cheques, potentially making the clearing and settlement process faster and more efficient.
The State Bank also expects the move to improve the security of cheque processing while supporting Pakistan’s broader shift toward digital payment infrastructure.
For customers, the change means the paper cheque will remain part of the deposit process, but its image and digital data will increasingly drive the clearing process between banks.
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